Richard Wilson: comparing a conversion discount with company progress
In discussing convertible notes, Richard questioned how a later valuation discount related to the progress made before the next round.
He separated two reference points
Richard described a discount to a future valuation and then asked how much the company might have progressed by that time. His concern was the relationship between those two changes.
The passage explains his preference
He said he had not used this structure himself. He used hypothetical changes in company progress to explain the comparison.
In Richard C. Wilson's words
"why would I only be getting a 20 percent discount off of that" (Richard C. Wilson, recorded Rainmaker Series module)
How to use this
- Identify the valuation date used in a comparison.
- Keep the speaker's personal preference attached to the example.
Questions and answers
What comparison did Richard make?
The conversion discount compared with company progress before the next valuation.